Deputy prime minister Angela Rayner has admitted underpaying stamp duty on a flat she bought in Hove.
Ms Rayner has referred herself to the prime minister’s ethics adviser over the purchase of the £800,00 flat off the seafront.
Tax experts say the extra bill she faces could be about £40,000 – the difference between the standard rate and the rate for second homes.
Ms Rayner said the flat was her main residence – but she is believed to spend more time at the family home in Greater Manchester where her children live.
Ms Rayner divorced her husband and no longer owns a stake in the Greater Manchester home but still considers it her primary residence because her children live there.
She told the Guardian this morning: “When purchasing the property my understanding, on advice from lawyers, was that my circumstances meant I was liable for the standard rate of stamp duty.
“However, given the recent allegations in the press I have subsequently sought further advice from a leading tax counsel to review that position and to ensure I am fully compliant with all tax provisions.
“I have now been advised that although I did not own any other property at the time of the purchase, the application of complex deeming provisions which relate to my son’s trust gives rise to additional stamp duty liabilities.
“I acknowledge that due to my reliance on advice from lawyers which did not properly take account of these provisions, I did not pay the appropriate stamp duty at the time of the purchase.
“I am working with expert lawyers and with HMRC to resolve the matter and pay what is due.
“The arrangements I have set out reflect the reality that family life is rarely straightforward, particularly when dealing with disability, divorce, and the complexities of ensuring your children’s long term security.
“Every decision I have made has been guided by what I believe to be in my children’s best interests.”
“I deeply regret the error that has been made. I am committed to resolving this matter fully and providing the transparency that public service demands.
“It is for that reason I have today referred myself to the Independent Adviser on Ministerial Standards, and will provide him with my fullest cooperation and access to all the information he requires.”
In response to her statement, tax expert Dan Neidle posted on Bluesky: “It’s very unusual for someone to pay the wrong amount of stamp duty when they’re receiving tax advice.
“There are probably three possibilities: (1) Ms Rayner got the law wrong, (2) She didn’t take the right advice, (3) She didn’t disclose all the facts to the law firm.
“If it’s the law firm’s fault, then hard to blame Ms Rayner.
“If it’s scenario 2 or 3, then completely fair to blame her
“Given Ms Rayner’s position, it’s reasonable to expect full transparency as to what happened.
“It sounds like it’s para 12 Sch 4ZA Finance 2003 that applied. A trust in favour of child can deem the parents as still owning the property.
“Yes, the rules are complicated, but if you can’t advise on complex stamp duty then you shouldn’t be advising on stamp duty.”
Literally no one in Brighton and Hove is surprised by this, the mystery is, if we can all see if her version of stamp duty was wrong, how couldn’t Angela Rayner, and who on earth was she using for advice.
It’s actually not as straightforward as you suggest. The higher-rate stamp duty rules (Finance Act 2003, Sch 4ZA) contain a deeming provision: if your minor child is a beneficiary of a trust that holds a residential property, the parent is treated as still owning that property.
That’s highly technical, and even some lawyers miss it. If her son’s trust gave him an interest in the former family home, then legally Angela Rayner was deemed to still own a property, so the Hove flat counted as an “additional dwelling” and attracted the 3% surcharge.
HMRC guidance confirms this, but it’s far from obvious without specialist knowledge. The underpayment still has to be corrected, but it’s not a case of her just ignoring the rules; it’s a genuine technical trap that I’d wager none of us would see.
She is scum. There easy.
Do you ever think for a second that your blind defence of Labour policies and politicians may be wrong Benjamin? Here is the clear tax advice from HMRC she needed to follow. It’s not complex or highly technical. It is sickening though.
‘If any of you will own, or part own more than one residential property worth £40,000 or more, you will have to pay the higher rates on your new purchase (unless there is another reason why the higher rates do not apply).
Include any residential property that:
is owned on behalf of children under the age of 18 (parents are treated as the owners even if the property is held through a trust and they are not the trustees)’
My so-called “blind defence” is usually just a defence of the importance of nuance, and that’s never wrong. That organically steers to the left, so what does that tell you about the right? Something for you to mull over, perhaps?
HMRC’s simplified wording is clear if you already know to look for it, but that’s the catch: it only applies because of a deeming provision most people (and some lawyers) routinely overlook. My point is that tax law is often trickier in practice than the bullet-point guidance suggests.
It’s also exactly the kind of rule that breaks natural logic. Someone can have no practical right to live in a property, no access, no control – yet still be taxed as if they did. That’s the trap in Angela Rayner’s case: the law deems her to “own” a home she doesn’t occupy, which then makes the Hove flat count as an additional dwelling.
It’s always easy to criticise in hindsight, but in the moment, it’s far from obvious unless you’ve dealt with these rules before.
Hi Benjamin, it’s clear on HMRC’s website that purchases in relation to trust’s needs further consideration and they can often be considered second homes.
Early media articles it implied that Angela pays second home council tax on the flat in Hove. If that’s correct, she clearly knows in spirit it’s a second home. In her statement yesterday she went to great lengths to make clear her main residence is the property up north (where most of her bills are registered) so again, she considers the Hove flat to be a second home (even if it’s the only one she now owns).
Irrespective of any complexities around the trust she has for her son, she clearly considers the Hove property a second home if what was reported earlier is correct and she pays second home council tax in Hove and she considers the northern property her main residence still. If that’s the case, she should have paid second home stamp duty imo.
And from the investigation report, it seems like she did receive the correct advice, and caveats to that advice as well, regarding this matter. Certainly seems quite conclusive that she should have paid the surcharge.
Horrid woman.Deputy PM sued the nhs and then used the award made to her child to buy a house hundreds of miles away from the child whose welfare she is prioritising and safeguarding —- couldn’t make it up
I mean, that’s just personal incredulity, not an argument. She clearly needs a place to live after the divorce.
Did you not read her statement yesteday. She LIVES in the property her son lives in. She said:
“It remains my family home, as it has been for over a decade. It contains the majority of my possessions and it is where I am registered for most official and financial purposes ranging from credit cards to the dentist to the electoral roll. But most importantly, it is where my children live and have gone to school and now college, and where I regularly live while caring for them.”
When she doesn’t live in the property with her son she has a flat in London she lives in. It’s not like Angela has nowhere to go Benjamin, she has made that clear herself and the facts are the Hove flat is one of 3 properties she lives in and switches between. She’s not destitute with no options.
But that point sits alongside (not instead of) the stamp duty analysis, which turns on ownership (real or deemed) rather than where someone lays their head.
For the higher rates on additional dwellings (the 3% surcharge), the test is whether the purchaser has a “major interest” in another UK dwelling worth £40k+. Under Finance Act 2003, Sch 4ZA, a deeming rule applies: if a minor child is beneficially entitled under a settlement/trust to a dwelling, the parent is treated as owning that dwelling. That remains so even if the parent no longer holds legal title, isn’t in occupation, and has no day-to-day access or control, which means two consequences flow from that. The Ashton property still counts as “owned” by Angela for the surcharge test, by operation of the deeming provision; and the usual “replacement of only or main residence” relief is hard to satisfy where the prior home is, as a matter of law, still treated as owned (via the trust), even if she divested her remaining legal share.
The London flat you mention is a red herring unless she owns it. If it’s rented/short-term work accommodation, it doesn’t enter the ownership calculus at all. If she does own it and it’s worth over £40k, it simply strengthens the conclusion that the Hove purchase was an additional dwelling.
So yes: she continues to spend time at the Ashton house (you’re correct), and yes: she also needed her own residence post-divorce. But the tax charge arises because the statute treats her as still owning the trust-held Ashton property for SDLT purposes. It’s counterintuitive, but that’s exactly the nuance people miss when they assume “where you live most” is the decisive factor, and why it’s a lot more complicated than hindsight provides.
She will build more council houses on hove seafront for unemployed – I know it. Come on for the working class we believe in you.
If I was given incorrect advice by a professional, I would be complaining like hell to the company, individual, boards of standards and their insurers. I haven’t heard the word negligence being uttered yet but the no-win-no-fee brigade must be circling the wagons quicker than her Cabinet colleagues!
Oh, absolutely, everyone would! But also, I would be selective about what I said in the public space.
However it is her choice to be in the limelight. I am an ordinary person who has very limited knowledge of trust law. I can understand that a trust set up to avoid liabilities such as Inheritance tax or care home fees, can still be considered as an asset if I derive benefit from it. That is, if I continue to occupy a property placed into a trust for my children, regardless of Land Registry records, I could feasibly be considered to be a beneficiary. The basic rule is; if it doesn’t feel right, it is probably wrong. For Ms Rayner not to have this basic insight is worrying for a holder of such an elevated office as Minister of State for Housing, let alone Deputy PM. I am an admirer of Angela but feel she is perhaps being somewhat disingenuous with regards this matter. I feel that she cannot continue as Minister as there is too much distraction. I would have thought that as she has been aware of this situation for a while, complaints would already have been lodged with claims to follow.
I can’t dispute the distraction part; it’s the sole focus of the media and attack lines, even if Kemi did a terrible job at it during PMQs, as per usual. I think we have to give credit, though, where she referred herself immediately upon learning about it. That’s a lot different to the previous government.
This wasn’t an IHT/care-fees dodge. A child injury/clinical-negligence settlement is typically court-approved and ring-fenced in a trust for the child’s long-term needs. Paradoxically, that protective structure is what triggers the SDLT surcharge in this instance. If she withheld key facts, that’s on her; if she disclosed them and the advisers missed the rule, then complaints/claims to regulators/insurers would be justified. But that’s evidence, not assumption-led.
It is pretty standard for a minister not to have relevant experience in the aspect they are a minister in; a classic example would be Jeremy Rhymes With Hunt when he was Health Secretary. They instead routinely rely on specialist advice; and rightly so. Also, one typically expects advice from an expert to be correct, so I think there’s a little bit of unfairness when there are people saying she should have known better. Expecting her to outperform the specialists isn’t realistic.
Labour are awesome
We all feel richer and they are fixing economy immigration etc. they are smashing it
So lucky we have Angela and Keir
Amazing stuff
Labour rule
Yes debt, crime and immigration are up and taxes will go up too but at least not tories!
Amazing people voted for Labour thinking for working class and got fiddled by party that is tanking the Uk. lol
If it’s a second home does she have to pay the 100% council tax surcharge for furnished properties that are deemed to be second homes
If she designates Hove as her main residence, it wouldn’t be a “second home” for council-tax purposes (but then another property could become the second home in its own council area).